This is actually only true when talking about extremists. According to Wikipedia, the term Is only applicable to polytheists and atheists, with a separate term being used for Christians and Jews, and most Muslim scholars do not believe in using the word at all anyway.

No, if you do not believe in the prophet you're not exactly an 'infidel'. The majority Muslims don't even use the word infidel to describe someone who doesn't believe in their religion. That's just something people assume of Muslims to say and believe, even though it's not true.

Yeah. Muslims have been given a negative image because of that 1 percent of extremists and idiots. The media focuses on them the most, have you ever heard a good thing about Muslims on the news? Probably not.

Infidel is also a Latin-based word. I don't see how it would gain much currency in the Arab world. They use "kafir" (sing.), "kuffár" (pl.).

Be wary that this word is also a racial slur in many parts of the world. Possibly because it means something else in another language, or it just somehow ended up that way. My internet is totally fucked so I can't Wikipedia it (maybe their site is just fucked?).

I'm not really sure about that. My main point is that Muslims don't use the word infidel at all against anyone who is not Muslim. Never in my life have I met someone, and I've been surrounded by Muslim communities all my life.